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Tag Archives: climate

Sep 27, 2022

How to Bring Paris Agreement Goals to Fixed Income Indices

This blog was co-authored by Smadar Shulman and Paulina Lichwa-Garcia. As the transition to net zero is becoming a critical consideration in portfolio management, the popularity of indices that incorporate the EU’s minimum standards for Climate Transition Benchmarks (CTBs) and Paris-aligned Benchmarks (PABs) has been gathering pace. Such benchmarks aim to select securities that are collectively…

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Aug 24, 2022

Using Indices to Help Align ESG Goals and Values

Take a closer look at the importance of index construction and underlying data across the ESG spectrum with S&P DJI’s Ben Leale-Green.    

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Jul 28, 2022

Schrödinger’s Carbon: Intensity and Paris Alignment

In quantum mechanics, Schrödinger’s Cat refers to the paradoxical consequences of a thought experiment: can a cat be simultaneously dead and alive? A similarly counterintuitive phenomenon can be found in the context of climate-based analysis: whereby an index may boast a relatively low carbon intensity and yet, perhaps surprisingly, not be judged as aligned with…

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Jul 12, 2022

Connecting Climate Goals with Relative Index Returns

The widespread global adoption of ESG and climate indices has created an accompanying need for better understanding regarding the performance impact of the various choices made in their design. As introduced in S&P DJI’s new Climate & ESG Index Dashboard, a Brinson-like “carbon attribution” teases out one particularly important source of returns. Untangling the exact…

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Jun 23, 2022

Data Driving the Weights within the S&P 500 Net Zero 2050 Paris-Aligned ESG Index

The World Meteorological Organization estimates that there is a 50% chance that global warming will exceed 1.5°C before 2026.1 The International Panel on Climate Change has warned that time is running out—climate change is no longer a problem for the future, and its associated physical risks are materializing more evidently.2 The world may need to…

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May 3, 2022

ESG in Australian Strategies: How Does It Look?

The world of sustainable investing, better known for incorporating environmental, social and governance (ESG) criteria into what was before mostly financially driven investment decision-making, seems to be here to stay. As ESG index investing continues to evolve, so does our suite of ESG indices—expanding both in terms of methodologies and regions covered. Australia is no…

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Mar 30, 2022

S&P PACT Indices Target Sector Neutrality

Recently announced results for a consultation on the S&P PACT™ Indices (S&P Paris-Aligned & Climate Transition Indices) reveal that they will now target country and sector neutrality. This has the potential benefit of comparing companies, as much as possible, to close peers (those in the same sector and country), while reducing active risk. The EU’s…

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Mar 29, 2022

Green Pools: Evolving ESG Trading Ecosystems

Compared to the wide range of liquid, tradable instruments associated to more traditional benchmarks like the S&P 500®, the trading ecosystem of ESG-based investment products is still in its infancy. But, with the increased volume in listed futures linked to the S&P 500 ESG Index and S&P Europe 350® ESG Index, change is afoot. Of…

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Mar 10, 2022

An ESG Solution for Varying Objectives: S&P 500 ESG-Based Indices

When it comes to ESG indices, different objectives require different solutions. Indices can range from simple to sophisticated, concentrated to benchmark-like, broad environmental, social and governance to climate-focused, and more. Our growing suite of ESG indices aims to serve a wide range of ESG needs and support the alignment of investments with ESG principles. When…

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Feb 24, 2022

As the UK Targets Net Zero by 2050, the S&P UK PACT Indices Can Too

The UK set goals of reaching net zero targets by 2050; these targets include transitioning to cleaner power and a more sustainable future, securing 440,000 well-paid jobs, and protecting the British consumer from global fossil fuels price spikes.1 The UK equity market certainly has some work to do, given its high weight in carbon-intensive sectors,…

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